Argentina’s indictment of former president is great news — it also goes against corrupt business leaders

An Argentine judge’s indictment of former President Cristina Fernandez de Kirchner is a big step in the global fight against corruption — not just because it seeks to put her behind bars for allegedly taking at least $69 million in bribes, but because it also goes after many business tycoons who made these payments.

In Latin America, and in much of the world, there’s little attention paid to the private sector’s responsibility in public corruption. We are used to reading big headlines about politicians who take bribes, but hear very little about the business people who pay them. That’s beginning to change, and it could mark a turning point in the battle against corruption.

Much like in Brazil’s recent corruption scandal that led to the prison sentences of former populist President Luiz Inacio Lula da Silva and of former construction business tycoon Marcelo Odebrecht, Argentina’s case against the former president has put both corruption-ridden politicians and leading business people in the spotlight.

According to the indictment of Argentine judge Claudio Bonadío, the former Argentine president led a corruption network that took more than $200 million in bribes from construction firms and infrastructure companies in exchange for public-works contracts.

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On at least 87 occasions, bags full of cash were delivered to Fernandez de Kirchner’s private residence in Buenos Aires’ posh Recoleta neighborhood, the Sept. 17 indictment says. Just the payments taken to the former president’s residence totaled $69.7 million, it adds.

The evidence against Fernandez de Kirchner looks overwhelming. In addition to eight handbooks that were written by a former government driver who took notes of his trips carrying bags full of cash to the former president’s apartment, dozens of former officials and business people have confessed to having made or collected those payments.

Now, nearly 50 former government officials and leading business leaders — including top executives of some of the country’s best-known construction companies — face corruption charges. The former president enjoys congressional immunity as an opposition senator, but she could lose it and go to jail if the Congress decides to take away her legislative privileges.

But one of the most important side-effects of the former president’s indictment is that it has shaken Argentina’s business community, which has been long used to making sweet deals with those in power.

“This is historic,” says Carlos Rozen, head of the Ethics and Compliance certificate course at Argentina’s UCEMA university. “It will mark a before and after in the history of Argentina’s business community.”

Rozen told me that he’s already seeing a big change: The number of compliance officers from private and public companies who apply to the UCEMA certificate program has more than doubled in recent months, from 40 to 100 people per course. And another 50 applicants are in the waiting list, he added.

The so-called “notebooks scandal” — after the driver’s notebooks that first uncovered the illegal payments — are already changing Argentina’s business culture, Rozen said.

“Before this happened, companies hired experts to write their ethics and compliance rules, but only to meet legal requirements,” said Rozen, who is also a founding member of Argentina’s Ethics and Compliance Association.

“Now, they understand that it’s not just a matter of having a piece of paper with ethics rules, but of changing behaviors, and changing the corporate culture with zero tolerance policies,” he added.

The indictment of Argentina’s former president and many business leaders may serve as a warning sign for the business communities of many other countries. I’m thinking of Mexico, for instance, where many corporations have long done shady deals with successive governments without paying any reputational or legal costs.

It takes two to tango, and the corruption epidemic that is hurting so many countries will only start to be reversed if the two sides — bribe payers and bribe takers — are punished. After reading what’s happening in Argentina, and what has happened in Brazil, I wouldn’t be surprised if business leaders in other countries think twice before paying a bribe. They should!

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